MLB Advanced Media and the NHL next week plan to begin co-selling an unprecedented online video package in which the out-of-market game subscriptions for both leagues will be marketed in a joint offering. In addition, MLBAM is set to cut a separate deal with ESPN in which MLB.TV will be sold with the media giant’s Insider content subscription in hopes of driving usage of both.
The NHL-MLBAM deal marks a rare level of cooperation between sports entities with limited common ownership. The leagues’ digital arms will sell the combined video package for $139.95, less than the cost of purchasing current packages for each sport individually.
The pairing aims to let each seasonal business extend its product and sales cycle as well as buttress subscription-based products during a time of deep retraction for all online advertising-based ventures. The two sides also hope to glean additional research into the consumption habits of hockey and baseball fans.
“We see a lot of cross-currents here,” said Bob Bowman, MLBAM chief executive.
“The timing to launch this now is really good, as our season is just beginning and theirs is beginning to hit a peak as well,” Bowman said. “We’ll see what happens. We’re excited, and we think this could be the start of something.”
The NHL says its research indicates that 80 percent of hockey fans are also fans of MLB. The league hopes that giving baseball fans who are also hockey fans the chance to experience the NHL’s digital product during the high point of its season will lead to new subscriptions for the 2009-10 season, said John Collins, NHL chief operating officer.
“It’s a whole new product that we’re exposing people to, and we expect to convert a lot of fans to a full-season package in the future,” Collins said.
The $139.95 price compares with MLB.TV’s peak price of $109.95 and a $79.95 tag for a half-season of NHL Game Center Live. Pricing for the ESPN-MLB bundle will be $129.95, which would also represent a discount given Insider’s annual price of $39.95.
The NHL and MLB have relatively little overlap of their schedules. The NHL regular season ends April 12, just one week after the start of MLB’s 2009 regular season, though the NHL digital package does provide for game coverage in the first two rounds of the playoffs.
The joint product offering developed out of the relationship Bowman and Collins have built. After Collins joined the NHL in late 2006, he reached out to Bowman for advice about building a digital business. Bowman gave Collins a tour of MLBAM’s New York headquarters and an overview of the company’s operation. When Bowman then proposed partnering on a digital package, Collins couldn’t turn him down.
“I give Bob a lot of credit for being innovative enough to reach out to us and ask us to explore the idea,” Collins said. “We think this partnership is a powerful one that will work well for fans.”
The partnership also serves as a stamp of approval of sorts for the NHL, which spent the past 12 months dramatically reworking its digital offerings. To have MLBAM, by many accounts the gold standard in digital sports content, seek out the NHL for a partnership is a “testament to the strides we’ve made,” Collins said.
Each league will continue to sell its respective online video packages individually in addition to the new joint offering,
Financial terms of the MLBAM-NHL deal were not disclosed, but the contractual term is for the duration of 2009. No firm options exist to extend the deal, but it is likely the pact will be renewed into 2010, Bowman said.
Terms for the MLBAM-ESPN deal were not disclosed.
ESPN already is MLBAM’s single largest partner in terms of rights fees. The pair renewed a long-standing digital rights agreement last year, and ESPN is believed to have been seeking such a linking of the premium online products for several years.
ESPN plans to use the baseball hookup as part of an aggressive program to spark its Insider service that also will include a far deeper link with ESPN The Magazine.
“We believe in having a diversified business model, even more so in this economy, and this helps tremendously,” said John Kosner, ESPN senior vice president and general manager of digital media.
